Consumer demand and political will create ideal conditions for better gas mileage

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Survey and economic analysis conducted by the Consumer Federation of America (CFA) demonstrates the immense and unprecedented harm that volatile gasoline prices over the past have done to household budgets. In 2011, we found that household gasoline expenditures set a record, reaching an average of over $2,850. Ten years ago, the average family spent 13 percent less on gas than it did on home energy costs like electricity and heating. Now, keeping fuel in the tank costs 40 percent more than powering a home.  In 2011, for the first time, the cost of gasoline exceeded the cost of car ownership as the largest component of the total cost of driving.
 
So it’s no wonder that our new consumer polling data shows strong consumer demand for more fuel-efficient cars. In our new national poll, 74 percent of respondents said the 2025 standard of 54.5 mpg is a good idea. Looking beyond the pocketbook benefits, 88 percent of those surveyed said the U.S. should reduce oil consumption. We also found that the more important cutting U.S. oil consumption was to average respondent, the higher the gas mileage he or she wanted to get.
 
Automakers are already responding to consumer demand for higher fuel economy. New-vehicle fuel efficiency is increasing at a faster rate than it has since the oil price shocks of the 1970s. One example: CFA found that the number of vehicles getting over 30 mpg has more than quadrupled in the last five years, moving from 12 models to 52.
 
In our recent analysis we found that choosing a more fuel efficient car consistently pays off for consumers, from every angle. Using Bureau of Labor Statistics data on car prices, we looked back at how much improvements in fuel economy technology cost consumers compared to how much these efficiency technology measures save drivers at the pump. For example, conservatively, $950 worth of the price increase in a Ford F-150 pickup since 2002 can be chalked up to technological improvements aimed at better fuel economy. But the typical owner who keeps the truck for six years will save $5,369 on gas because of those very improvements. All told, the consumer will come out $4,419 ahead. Not bad for a purported gas-guzzler.
 
In our new analysis we also compare pairs of similar vehicle models today to determine if choosing a slightly more expensive, but also more fuel-efficient car today is a good investment for consumers. We found that, indeed, fuel economy is a good investment. We found, for example, that a 33 mpg Honda Civic priced at $15,805 is a better consumer investment than the less expensive 29 mpg Mitsubishi Lancer (priced at $15,695). The Civic owner will save enough money on gasoline after three months of owning the car to cover the higher sticker price. And, the owner will end up saving an additional $243 in the first full year of ownership. Comparing several other vehicle pairs, we came to the same conclusion.
 
American families should also rest assured that coming fuel economy improvements will not price consumers out of the market. By the end of the average auto loan, the average consumer will save about $800 by purchasing a car that meets the 2025 standard. By the tenth year of ownership, the consumer will save more than $3,000.
 
The new gas mileage standard will not only save American families and businesses money, it will also help trim oil imports, which is an economic and environmental plus for the nation. It will prod American manufacturers to keep innovating and to stay competitive in the global marketplace. These are the reasons that consumer experts, automakers, auto workers, national security experts, public health organizations and environmentalists all back the standard.
 
For the good of all Americans, especially consumers, 54.5 mpg by 2025 is an idea whose time has come.
 
Cooper is director of research for the Consumer Federation of America (CFA). Gillis is director of public affairs for CFA and author of The Car Book. CFA is a national association of nearly 280 non-profit organizations working to advance the interests of consumers. 


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